China is a major rice exporter, but it traditionally imports premium-fragrant rice from Thailand.

China stepped up rice purchases last month from Vietnam and Thailand after dwindling stocks at home sent prices soaring.

Vietnam, the world's second-largest exporter of rice, has stepped up sales to China but it is unable to meet the demand fully due to low domestic stocks.

Iraq is also seeking to buy 165,000 more tonnes of Thai rice this week after the United Nation's World Food Programme awarded Thailand a tender for 152,500 tonnes of rice for the strife-torn nation.

Rising prices mean farmers will no longer have to sell their harvest to the government at the fixed rate of Bt5,100 per tonne. They can get Bt5,600 for their paddy on the market.

The export price for white rice is now $250 per tonne, compared to $190 at the same time last year.

Watana will head a delegation to the United States from tomorrow to ThursdayMarch 21-25 to meet with US Trade Representative Robert Zoellick. They will discuss a starting date for formal negotiations on a bilateral free-trade agreement.

The Commerce Minister will also meet some US senators and representatives from the US-Asian Business Council.

Thailand's biggest export destination is the US, with more than $20 billion in two-way trade each year. The US has also $16 billion in direct investment here, according to the Commerce Ministry.

Thailand has been accused of failing to protect intellectual property rights and dumping shrimp in the American market.

Watana hopes to clarify those issues. "We won't agree [to the FTA] if we aren't satisfied that it benefits the country," he said.